Many of the reasons for auto insurance rate increases over the past decade are beyond our control. According to Moneywise’s “Why are your car insurance premiums rising?,” auto insurance rates have doubled in past decade. There is a lot of talk about the rising gas prices eating into household incomes. Not as much talk is made about rising auto insurance prices, but that may be because a lot of people just continue to pay their bill monthly without even keeping close track of price increases.
The cost of auto insurance went up 15% last year in the UK, and increased 110% over the past ten years. This article states that the top reason for auto insurance rate increases is a dramatic increase in personal injury claims. In the past, the majority of car insurance claims were paid out for repairs. But half of claims are now paid out for injuries and medical issues related to car accidents. Between 2010 and 2011, there was an 18% increase in medical claims like whiplash. That is the largest increase they have ever seen in the UK. Research has shown a link between the number of no win, no fee lawyers specializing in car accident claims and the amount of claims filed in a certain location. There could be new legislation soon regarding the way that some claims lawyers do business.
Another reason for increasing auto insurance rates is an increasing cost to repair vehicles. New technology is great for car owners, but it really increases the cost to fix the vehicles when there is damage. One example is that of a broken headlight that used to need a new light bulb and maybe some glass if that cover were broken as well. Now an entire sealed panel may have to be replaced just because of a broken headlight cover.
Some organizations believe that auto insurance companies are to blame for rising premiums because competition with other insurers is causing them to get more expensive repairs and rental cars when their insured was not at fault in an accident. Rates have been going down this year slightly because of heavy competition in the auto insurance market. It’s difficult when things beyond your control are setting your auto insurance rates, but the best you can do is keep the factors that are under your control in your favor to get lower auto insurance rates.